The Subscription Economy is Here

The way we do business has fundamentally changed.

The World Subscribed

In the last 10 years, there's been a dramatic shift in the way both consumers and companies want to do business. Today, people would rather subscribe to services than to buy products. It's happening everywhere. And it will have a dramatic effect on your business.

Zuora Subscription Economy News - TechCrunch
Zuora Subscription Economy News - TechCrunch
Zuora Subscription Economy News - The Next Web
Zuora Subscription Economy News - Reuters

Everything Is Different

Are you ready?

The Old World

Success used to be tied to the number of units sold. That's why traditional ERP systems were designed to revolve around the product. It was all about the one-time transaction. Sure, ERPs can tell you how many units you've shipped, but good luck trying to understand how many active customers you have and how they’re using your products.

The New World

Today, the most successful businesses are focused on building valuable customer relationships. You need a system that understands how those relationships evolve over time. And you need a system that is equipped to manage that evolution - something SKU-based ERP systems just can’t do.

The Old World

Pricing used to be a heck of a lot easier when there was one price, one SKU. And traditional ERPs & GLs could support this model without any problems. But SKU-based product catalogs simply don’t hold up when you launch subscription services. With traditional tools, you end up creating different SKUs for the same product every month. 'January Service' anyone?

The New World

Creative pricing and packaging is the new strategic weapon for a subscription business. With the right pricing strategy, you'll attract more customers and manage to keep your competitors on their heels. Between monthly and annual options, pricing tiers, free trials, freemium editions and time-based discounts - only a plan-based pricing catalog can handle all that complexity and still support your business goals.

The Old World

If your only concern is a one-time product-based transaction, traditional ERPs work great. Sell, ship, bill, and then onto the next order - that was the old world of commerce. But what about add-ons, upgrades, renewals? These concepts simply don’t have a place in the traditional world of commerce.

The New World

Success in the Subscription Economy is rooted in the customer lifecycle. You need the tools to help shepherd your customers from a free trial to a premium offering to a renewal - all while keeping track of their value over time. You need to go beyond “buy”, and evolve to “subscribe”, “upgrade” and “renew”.

The Old World

It used to be that you sold either to consumers, or you sold to businesses. You either had a low-touch, low-complexity, high-volume B2C business - or you operated in a high-touch, high-complexity, low-volume B2B environment. But that was then...

The New World

The most successful companies in the Subscription Economy have found a way to sell to anyone - from consumers, to small businesses, to the largest enterprises. To be successful, you’re going to need a system that can handle both high volume and high complexity.

The Old World

Sure, financial metrics like bookings, billings, cash and revenue were tracked in the old world of commerce, but they were backwards-looking and focused on one-time transactions. When it comes to tracking metrics for a subscription businesses, traditional finances simply can’t account for the whole picture.

The New World

In the Subscription Economy, it’s all about looking forward. You need the right tools to measure key metrics like monthly recurring revenue (MRR) and total customer value because those are the metrics that actually matter for your business.

The New Model For Success

These 9 principles change everything.


Price

Pricing flexibility is your new strategic weapon.

Acquire

Customer acquisition should be fast, simple and streamlined across any channel.

Bill

Bills need to be efficiently generated, accurate and easy to understand.

Collect

Payments need to be collected fast and settlements performed easily to eliminate lost cash.

Nurture

It’s critical to give customers the control they need
-- or risk dissatisfaction.

Account

Account for revenue and close books faster with a strategy that handles complexity.

Measure

Visibility into customer, subscription and financial metrics means better, faster decision-making.

Iterate

Get comfortable with pricing iteration - it’s never right the first time.

Scale

Services should be built on an enterprise-grade infrastructure that is mission-critical, reliable and scalable.